On the Silicon Exposed blog, Andrew Zonenberg looks at Apple's announcement that it won't be able to decrypt its phones for law enforcement agencies. Zonenberg argues that "disk encryption isn't as much of a major game-changer as people seem to think."
First off, the changes in iOS 8 are encrypting data on disk. Voice calls, SMS, and Internet packets still cross the carrier's network in cleartext. These companies are legally required (by CALEA in the United States, and similar laws in other countries) to provide a means for law enforcement or intelligence to access this data.
In addition, if Eve can get within radio range of Alice or Bob, she can record the conversation off the air. Although the radio links are normally encrypted, many of these cryptosystems are weak and can be defeated in a reasonable amount of time by cryptanalysis. Numerous methods are available for executing man-in-the-middle attacks between handsets and cell towers, which can further enhance Eve's interception capabilities.
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